A lawsuit by Texas Southern University against architects and engineers was dismissed with prejudice where the plaintiff failed to file a certificate of merit with its complaint. The trial court did not abuse its discretion if refusing to allow an extension of time for filing the certificate, or for dismissing the complaint with prejudice instead of without prejudice. Texas Southern University v. Kirskey Architects, Inc., 2019 WL 922296 (TX 2019).
Texas code requires that a plaintiff filing a lawsuit against design professionals must file a certificate of merit with its complaint. Tex. Civ. Prac. & Rem. Code §§ 150.001-.004. In this case, construction of the project in question began in 2005 and was declared substantially complete on July 31, 2007. The plaintiff learned of “various material cracks” in the building’s masonry within six months of completion.
The university hired a consulting firm to inspect the building and evaluate a repair plan. Repairs were performed but problems persisted. Another repair consultant was hired by the university to analyze the problems, and it advised that the most likely cause of the observed distress was differential movement of the structure caused by heaving of subgrade sols sue to increased moisture. The university took no action in response to that report.
A number of years later (2014), the university asked the state Office of Attorney General to file suit. That office directed the university to engage consultants to fully assess the condition and prepare estimates of costs to repair all observed defects. The university hired the same repair consultant again to evaluate the issues, and the consultant concluded it would cost about $5 million in repairs.
At the beginning of 2017, the assistant attorney general advised the university that due to other commitments it wouldn’t be able to file the lawsuit. Private counsel was retained to file the suit. That counsel discovered that none of the professionals that were involved in preparing the repair report were able to provide affidavits required by the certificate of merit statute. The reason for this is not explained by the court decision.
Counsel then sent written notice of claims to the original design professionals against whom suit was subsequently filed. The letter offered to postpone filing suit if the firms would agree that the written notice extended the ten-year statute of repose period for filing suit. None of the design professionals agreed to that, and the university subsequently filed suit before the deadline set by the statute of repose – but without the certificates of merit that were required by the certificate of merit statute.
The university argued that the certificate in this case did not have to be filed with the complaint. One argument was that the contemporaneous requirement does not apply to any case “in which the period limitation will expire within 10 days of the date of filing and, because of such time constraints, the plaintiff has alleged that an affidavit of a third-party licensed professional could not be prepared.” In such a situation, the statute states that a plaintiff “shall” be granted a thirty (30) day extension to file a certificate of merit and may obtain further extensions for good cause and as the court determines “justice requires.”
In analyzing the trial court dismissal, the appellate court noted that the university didn’t allege that the statutes of limitations or repose expired on July 31, 2017 requiring them to file suit by that date. Therefore, the ten day rule cited above didn’t apply and the 30-day extension wasn’t triggered.
The university argued, in the alternative, that the trial court should have granted an extension for “good cause.” The appellate court rejected this argument because it found that since the 30-day extension was never triggered, the trail court “would have lacked discretion to grant any further extension in excess of thirty days for good cause…”
Finally, with regard to whether the dismissal should have been without prejudice instead of with prejudice, the court concluded that the statutory wording stating that the dismissal by the court “may be with prejudice” does not permit courts to apply their discretion arbitrarily or unreasonably.
Because there is no statutory guidance concerning how a court should exercise its discretion, the appellate court stated it would consider various factors given the facts and circumstances of the particular case.
Based on when the university first became aware of the problems and the needed repairs, and the fact that the university filed suit within the time period by the statutes of limitations and repose, and stated with its Petition that it would supplement with certificates of merit, the court found that the university couldn’t claim it was unaware of the need to file certificates of merit. For these reasons, the dismissal with prejudice was affirmed.
About the author: Article written by J. Kent Holland, Jr., a construction lawyer located in Tysons Corner, Virginia, with a national practice (formerly with Wickwire Gavin, P.C. and now with ConstructionRisk Counsel, PLLC) representing design professionals, contractors and project owners. He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects. He is publisher of ConstructionRisk.com Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932. This article is published in ConstructionRisk.com Report, Vol. 21, No. 6 (July 2019).
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